MUMBAI: N R Narayana Murthy's second innings at the helm of affairs at Infosys is being seen as an acceptance on the part of the company - famous for its openness and business ethics - that things have not gone well over the last few years.

Since everyone on Dalal Street - from shareholders to fund managers to the government - has great respect for the man, popularly called NRN and Infy, they would surely see the move as a strong positive for its stock, which has underperformed most of its peers over the last three years, analysts and brokers said. At the same time, they said that coming back of NRN would also raise expectations from the company, which for years was a favourite among investors for exceeding its own earnings targets and also analysts' expectations.

"Given the fast changing IT world, it (Infosys) needed a person who could see the future and make the company future ready. NRN has that in him," said Raamdeo Agrawal, joint MD, Motialal Oswal Financial Services.

"I believe since he is coming back from retirement to take charge, it's an admission on the part of the company that something was amiss...that two to three years ago they did not position itself to meet the future challenges and be at a leadership position," said Agrawal, who advised long term investors to stay invested in the stock.

Over the last few years, Infy, once a technology bellwether, has disappointed shareholders and to some extent, also lost its flavour among software professionals. For example, during the quarter-ended March 2013, Infy missed its guidance, which was its second miss in as many years. Post the results announcement, although its management put up a brave face, investors were brutal.

On April 12, the day of its results, the stock lost about a quarter of its value in intra-day trade and closed down 21%, its steepest single-session crash in a decade. Subsequently, CLSA warned that the stock could be dead money for quite sometime and the harm done to its credibility was likely to last longer.

On the issue of offering job opportunity as well, analysts said the IT major was losing its appeal. Infy, once an employer of choice, saw rising attrition in fiscal 2013, a year that could barely be termed a good year for the software services industry during which it did not give any hike in salaries. During the year Infy's attrition rate rose to 19.4% against 17.6% a year earlier, Nirmal Bang Institutional Equities Research, a domestic brokerage, called this "a worrying sign and a reflection that the Infosys brand is losing value among employees".

Analysts, although positive about NRN's comeback bid, feel that given the changing dynamics of the IT sector, the job at hand for him would be a tough one.

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"Given the fast changing IT world, it (Infosys) needed a person who could see the future and make the company future ready. NRN has that in him," said Raamdeo Agrawal, joint MD, Motialal Oswal Financial Services.